China surpasses US in becoming richest country in the world

Nov 18, 2021: China has seen tremendous economic growth over the past two decades, making the world’s largest country to become the richest also, surpassing its bitter rival the United States.

Consultants McKinsey & Co. research arm has prepared a report concluding that China is in the top 10 countries with more than 60% of the world’s income.

China tops the list of the richest countries in the world as it has amassed about one-third of the world’s net wealth over the past two decades. “We are richer than ever,” said Jan Mishke , a partner at the McKinsey Global Institute in Zurich.

The study found that global net worth increased to $514 trillion in 2020 from $156 trillion in 2000. The report reveals that the country’s wealth increased from $7 trillion in 2000 to $120 trillion.

Almost two decades ago, China accelerated its economic growth after joining the World Trade Organization. The United States has seen its net worth exceed $90 trillion, however, property prices have risen more quietly.

According to the report, more than two-thirds of the world’s wealth is held by 10% of the world’s elite. According to McKinsey’s report, 68% of global net wealth can be attributed to real estate.

According to a Bloomberg report, rising real estate prices could make it harder for many people around the world to afford housing, leading to an economic crisis.

The report states, “Surging real-estate values can make home ownership unaffordable for many people and increase the risk of a financial crisis — like the one that hit the US in 2008 after a housing bubble burst, China could potentially run into similar trouble over the debt of property developers like China Evergrande Group.”

The McKinsey report said the ideal resolution to this problem would be for an increase in more productive investments that would increase global GDP.

The report cautioned saying, “The nightmare scenario would be a collapse in asset prices that could erase as much as one-third of global wealth, bringing it more in line with world income.”

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